12/27/2007, 11:45pm, EST
Thursday, December 27thWal-Mart axes short-lived movie service
Wal-Mart has shut down its fledgling movie service with virtually no announcement, according to user reports. Visitors to the official site are greeted with a message that the site has shut down as of December 21st and redirects users to information about the closure. Videos and other content remain playable but will still include the copy restrictions of before, which prevent the videos from transferring to non-purchasing computers but allow their use on as many as three portable media players that support guarded Windows Media content. No refunds are available and customers will have to visit a Wal-Mart store to buy more videos, the retailer warns.
The shutdown comes just 10 months after the opening of the store in February and is the result of poor sales despite the shop remaining in a beta (testing) state, Wal-Mart and its content system provider Hewlett-Packard say. While Wal-Mart is not directly responsible for shutting down the store, sub-par income for HP has forced an early termination of the backbone behind the service and left Wal-Mart with little choice, according to a Wal-Mart spokesperson.
An end to Wal-Mart's store dashes the early hopes of movie studios. The video download site was the first to sign all major Hollywood production houses to its catalog, potentially supplying the retail chain with an edge over Apple's iTunes Store and other services that have unsuccessfully negotiated licenses for key studios or else are limited to older titles. Wal-Mart is rumored to have been instrumental in blocking some deals with Apple to shelter its lucrative physical video sales, which account for a large portion of all video revenues in the US.
The firm's efforts to sell videos online are winding down just as word has surfaced that Apple may be opening an iTunes movie rental service that would enlist at least 20th Century Fox and would likely involve Disney as well, playing on Apple chief Steve Jobs' membership on the Disney board of directors. Wal-Mart's store has only allowed purchases since its opening and may have suffered from this decision as a result.
Filed under: industry, Apple
Other story tags: HP, Wal-Mart, Fox, Windows Media, PlaysForSure
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The irony here is that Wal-Mart relied on HP that relied on Microsoft and AOL relies on Amazon that relies on Microsoft which itself no longer relies on its own PlaysForSure. When a core component of a product or service depends on the rate of innovation of another party over which you have no control or influence, it’s time to rethink strategy. It’s also time to ask yourself, twice or thrice removed from core competency, should you really be in such a business?
Strategic design risks (1): Wal-Mart’s foolhardy reliance on “partners” http://counternotions.com/2007/12/28/walmart-video/
The irony here is that Wal-Mart relied on HP that relied on Microsoft and AOL relies on Amazon that relies on Microsoft which itself no longer relies on its own PlaysForSure. When a core component of a product or service depends on the rate of innovation of another party over which you have no control or influence, it’s time to rethink strategy. It’s also time to ask yourself, twice or thrice removed from core competency, should you really be in such a business?
Strategic design risks (1): Wal-Mart’s foolhardy reliance on “partners” http://counternotions.com/2007/12/28/walmart-video/
goodness, this must have tanked like the Titanic if they pulled it after only 10 months.
You'd think a company with pockets as deep as Walmart, would at least have a midterm outlook on a new venture like this, but I guess I'm no businessman...
If Apple suddenly closed the ITMS, where does that leave consumers who have hundreds or thousands of songs that will cease to work?
While Wal-Mart is allowing that content to work for now - when do they pull the plug because it becomes less expensive than dealing with the complaints.
Just like any product the studios want all formats to have a life-cycle. Records, 8-tracks and cassettes went away in favor of CD's, which is one reason they are selling less overall - CD"s are nearly a perfect form factor.
By introducing DRM into digital downloads Studios can control the life of the products by making them incompatible at some point in the future.
now, i'm not faulting apple. if the sleazy record companies required drm, then there's not much apple could do to prevent it in their fledgling service. but it sure is a nice happy accident that dependency was the result.
i look forward to the day when all drm-free tracks can be had. i just hope that apple does not charge too much to acquire them for existing purchases.
walmart, go back to selling gallon jars of pickles at below the manfufacturer's cost forcing your suppliers into the red.
I knew there had to be something.